Technology Adoption under Production Uncertainty: Theory and Application to Irrigation Technology

2006/07/20 by Phoebe Koundouri, Céline Nauges, Vangelis Tzouvelekas · 411 citations
Agricultural and Biological Sciences · Economics, Econometrics and Finance · Engineering · #Agricultural Innovations and Practices #Agricultural economics #Agricultural engineering #Agricultural risk and resilience #Business #Capital (architecture) #Economic Growth and Productivity #Economic shortage #Economics #Engineering #Environmental economics #Finance #Geography #Hedge #Irrigation #Microeconomics #Natural resource economics #Order (exchange) #Production (economics)

paper · doi:10.1111/j.1467-8276.2006.00886.x

published in American Journal of Agricultural Economics 88(3), 657-670 (Wiley)

openalex publication_date 2006/07/20 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

We propose a theoretical framework to analyze the conditions under which a farmer facing production uncertainty (due to a possible water shortage) and incomplete information will adopt a more efficient irrigation technology. A reduced form of this model is empirically estimated using a sample of 265 farms located in Crete, Greece. The empirical results suggest that farmers choose to adopt the new technology in order to hedge against production risk. In addition, we show that the farmer's human capital also plays a significant role in the decision to adopt modern, more efficient irrigation equipment.

Citations

• Specification Tests in Econometrics

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